Retailers Morrisons – the fourth largest supermarket chain in Great Britain – has been taken over by an American private equity company.
The deal was announced after a rare timed auction was held to decide the fate of Morrisons, which was the focus of two competing offers from private equity firms.
The takeover was not without controversy, however, after MPs raised concerns about plans to run Morrison’s operations through a Cayman Islands-based mailbox company.
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Who Does Morrisons Own Now?
Morrisons is now owned by Clayton, Dubilier & Rice (CD&R), a US private equity firm. CD & R’s offering to the retailer was led by Sir Terry Leahy, former CEO of Tesco.
CD&R was able to fend off competition from competing bidder Fortress, which is supported by the Japanese financial giant Softbank.
Morrisons rejected a £ 5.5 billion offer from CD&R in June, stating that it had “significantly devalued” the company. With a £ 7 billion offer, it has now been successful.
When was Morrisons founded?
Morrisons was founded in 1899 by William Morrison, a Bradford-based egg and butter trader.
Although Morrisons has been a public company since 1967, the Morrisons family retains a 10% stake in the company.
It was reportedly family members who first asked private equity bidders about a possible takeover of the company because of concerns about the company’s financial performance.
What does the takeover of Morrisons mean?
The Morrisons acquisition has given cause for concern. Private equity firms generally don’t have a good reputation in the UK retail sector – the Debenhams private equity acquisition in particular is widely seen as an accelerated chain failure.
Some MPs also reacted angrily and alarmed when CD&R announced it would use a mailbox company in the Cayman Islands – a well-known tax haven – to run the business.
However, CD&R has announced that Morrisons will keep its Bradford headquarters and continue to pay UK taxes.
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